The air is heavy with festive fervour, and it’s a cinch you’ve splurged on sales more than you intended to. You may not be entirely to blame. Armed with a bagful of psycho logical tricks, pricing techniques, and behavioural triggers, merchants and e-retailers push you into purchasing more during the festive season. These strategies brazenly tap into your fear of missing out (FOMO), desire to save more, get the best value for money, seek immediate rewards, or feel good about yourself.
“The festive season removes the reasons that normally stop us from splurging. Diwali, for instance, is associated with positive emotions, and research on impulse buying finds that positive mood enhances the urge to buy on impulse,” says Dr Prerna Kohli, Founder, MindTribe. The word ‘sale’ itself is probably the biggest psychological trap. “American economist Richard Thaler’s work on mental accounting describes two pleasures in a purchase: the item itself, and the deal. A sale sells you the latter,” says Kohli. And so begins a psycho logical tug-of-war between retailers and customers, which the latter often lose.
Artificial urgency & scarcity (Trigger: FOMO): Countdown timers like ‘sale ends in 5 minutes’ or messages like ‘only 2 left’ create FOMO, pushing shoppers to make rushed, impulsive decisions without comparing prices or assessing their needs. “Scarcity speeds up what a consumer researcher calls the perceived perishability of an offer. You stop evaluating and start grabbing,” says Kohli. When customers believe a product is running out of stock, they feel compelled to buy it immediately. Similarly, countdown timers create the impression that an offer will soon end, whereas the product is likely to be available later, probably for a lesser price.
Inflated reference prices (Anchoring bias, which makes people rely on the first piece of information they receive while making decisions): Displaying a high original price next to a discounted price makes the offer appear more attractive. Shoppers focus on the apparent savings rather than checking whether sale price is truly competitive. A product marked down from Rs.4,999 to Rs.2,999 draws the shopper’s focus to the Rs.2,000 saving. “Reference prices work as anchors, the starting point from where shoppers judge value and savings,” says Kohli. Comparing prices across retailers and checking historical prices can help assess the actual discount.
Spend thresholds (Goal gradient effect, which makes people increase speed and effort closer to the goal): Messages like ‘spend Rs.300 more to get free delivery’ lures people into buying things they don’t really need. “There’s a word for this—spaving—spending more in order to save,” explains Kohli. Retailers exploit the goal gradient effect by setting spending thresholds for discounts, gifts and rewards.
Decoy effect (Value for money): Retailers of ten introduce a decoy, which is a third price option to make a more expensive product appear cheaper. For instance, if a retailer offers two price choices for an appliance, say, Rs.1,500 and Rs.3,000, customers will lean towards the former. If, however, the shopkeeper introduces a third option that is slightly lower than the highest price, say, Rs.2,700, it will attract the buyer. When the premium option seems to offer more benefits for a small additional cost, shoppers upgrade even though the cheaper product would have worked as well.
Cashback, bank offers, rewards (Reward seeking behaviour): Discounts, cashback, credit card offers, coupons at checkout make customers feel they are being rewarded for spending. “A free gold coin once the bill crosses a set amount, a lucky-draw coupon for every Rs.1,000 spent, or a scratch card make you feel your money is being stretched,” says Kohli. However, these offers may require minimum spending or fulfilling other conditions. Shoppers may buy a more expensive product just to qualify for a benefit that does not justify the additional expense.
No-cost EMI offers (Payment decoupling): When a purchase is presented as a small monthly instalment rather than a large up front expense, its total cost can feel less significant. “Breaking big costs into bite-sized instalments makes expensive goods look affordable,” says Vishal Dhawan, Founder & CEO, Plan Ahead Wealth Advisors. This separation between purchase and pain of paying makes it easy to justify the higher expense. Remember that even a no-cost EMI may include processing and other fees.
Number tricks (Charm price, left digit effect): Using numbers to create an illusion of lower prices is often used by retailers. For instance, items with prices ending in 9 (charm price) are typically bought more by customers. This is because people focus on the leftmost digit of a number, which appears to be much lower than the next whole number, even though the difference is just one rupee. Similarly, removing commas from prices or using a number with a decimal instead of a whole number makes these appear less expensive.
The 24-hour rule: When you feel tempted to buy something you had not planned, wait at least 24 hours before making the purchase. This cooling-off period helps assess whether you genuinely need the product or are reacting to the discount or ‘limited period’ offer. “The urge to buy is a wave; it rises, peaks and passes, usually within hours,” explains Kohli.
The same principle applies to flash sale clocks that trigger panic and lead to FOMO. “Take a breather from your phone or the store shelf. Stepping away lets common sense return before FOMO takes over,” says Dhawan.
Use cash, remove card details: Bring back the pain of paying by using cash, says Kohli. Using cash or a debit card makes spending feel tangible, while watching money leave your hands or account creates a natural brake. Only swipe a credit card if you can pay the bill in full. Also delete the auto-filled credit card details and digital wallets from shopping apps. “Forcing yourself to manually type card details adds enough friction to rethink the purchase. Getting up to find your physical wallet and typing out the card details gives your mind time to pause,” says Dhawan.
Decode the numbers: Round off Rs.1,999 to Rs.2,000; treat ‘only 2 left’ as a design choice, not fact; and don’t add a Rs.500 item to avoid a Rs.50 delivery fee. “Translate every ‘save’ into ‘spend’. If ‘save Rs.4,000’ means spending Rs.6,000, ask yourself if you would buy the item without a sale,” says Kohli.
Calculate the full EMI cost: Don’t judge af fordability by the monthly instalment alone. Consider the final bill: full repayment amount, processing fees, interest, and any discounts you may forgo by choosing EMI. If paying the full price strains your wallet, postpone the purchase, and don’t use EMIs to purchase ‘wants’.
Don’t shop depressed: Never shop when you are depressed, tired, hungry, or late at night because depleted people spend more, says Kohli. Also, take a handbag instead of a shopping cart, and don’t befriend the salesperson since these tactics are meant to make you spend more, as countless research studies claim.
Ask these questions before buying in a festive sale
1. Would I buy if the item weren’t on discount?
If the answer is no, you may be reacting to the big discount rather than addressing an actual need. This can help you distinguish planned purchases from impulse buys triggered by festive sale promotions.
2. How often will I use it?
An expensive gadget used daily may offer better value for money than a discounted product that remains unused. Estimate the cost per use by dividing the purchase price by the number of times you expect to use it. It will help assess whether the product offers lasting value or a temporary high.
3. Is this a genuine discount?
A big discount doesn’t always translate into a good deal. Compare the discounted price with the product’s usual selling price across different retailers and platforms. Also, consider whether you can find the same product at a lower price elsewhere. Focus on the final price, not the discount.
4. What am I giving up to afford this?
Every purchase involves an opportunity cost. Consider whether the amount could be used for savings, debt repayment, an emergency fund or a financial goal. If a purchase forces you to postpone an important expense, the discount may not justify the financial trade-off.
5. Can I buy this without a credit card or EMIs?
If you cannot afford a product without borrowing, reconsider whether you need it immediately. Credit cards and EMI schemes make expensive products seem affordable by breaking payments into smaller amounts, but interest, processing fees and late payment penalties can increase the total cost. For non essentials, save and buy when you can afford it.
“The festive season removes the reasons that normally stop us from splurging. Diwali, for instance, is associated with positive emotions, and research on impulse buying finds that positive mood enhances the urge to buy on impulse,” says Dr Prerna Kohli, Founder, MindTribe. The word ‘sale’ itself is probably the biggest psychological trap. “American economist Richard Thaler’s work on mental accounting describes two pleasures in a purchase: the item itself, and the deal. A sale sells you the latter,” says Kohli. And so begins a psycho logical tug-of-war between retailers and customers, which the latter often lose.
PSYCHOLOGICAL TRIGGERS
“Festive sales and discounts can make pricing look attractive, but it may not add value to your purchases and assets,” says Priyadarshini Mulye, a Securities and Exchange Board of India (Sebi) registered investment adviser. Here are some ways you can tackle psychological arm-twisting and how to avoid it.Artificial urgency & scarcity (Trigger: FOMO): Countdown timers like ‘sale ends in 5 minutes’ or messages like ‘only 2 left’ create FOMO, pushing shoppers to make rushed, impulsive decisions without comparing prices or assessing their needs. “Scarcity speeds up what a consumer researcher calls the perceived perishability of an offer. You stop evaluating and start grabbing,” says Kohli. When customers believe a product is running out of stock, they feel compelled to buy it immediately. Similarly, countdown timers create the impression that an offer will soon end, whereas the product is likely to be available later, probably for a lesser price.
Inflated reference prices (Anchoring bias, which makes people rely on the first piece of information they receive while making decisions): Displaying a high original price next to a discounted price makes the offer appear more attractive. Shoppers focus on the apparent savings rather than checking whether sale price is truly competitive. A product marked down from Rs.4,999 to Rs.2,999 draws the shopper’s focus to the Rs.2,000 saving. “Reference prices work as anchors, the starting point from where shoppers judge value and savings,” says Kohli. Comparing prices across retailers and checking historical prices can help assess the actual discount.
Spend thresholds (Goal gradient effect, which makes people increase speed and effort closer to the goal): Messages like ‘spend Rs.300 more to get free delivery’ lures people into buying things they don’t really need. “There’s a word for this—spaving—spending more in order to save,” explains Kohli. Retailers exploit the goal gradient effect by setting spending thresholds for discounts, gifts and rewards.
Decoy effect (Value for money): Retailers of ten introduce a decoy, which is a third price option to make a more expensive product appear cheaper. For instance, if a retailer offers two price choices for an appliance, say, Rs.1,500 and Rs.3,000, customers will lean towards the former. If, however, the shopkeeper introduces a third option that is slightly lower than the highest price, say, Rs.2,700, it will attract the buyer. When the premium option seems to offer more benefits for a small additional cost, shoppers upgrade even though the cheaper product would have worked as well.
Cashback, bank offers, rewards (Reward seeking behaviour): Discounts, cashback, credit card offers, coupons at checkout make customers feel they are being rewarded for spending. “A free gold coin once the bill crosses a set amount, a lucky-draw coupon for every Rs.1,000 spent, or a scratch card make you feel your money is being stretched,” says Kohli. However, these offers may require minimum spending or fulfilling other conditions. Shoppers may buy a more expensive product just to qualify for a benefit that does not justify the additional expense.
No-cost EMI offers (Payment decoupling): When a purchase is presented as a small monthly instalment rather than a large up front expense, its total cost can feel less significant. “Breaking big costs into bite-sized instalments makes expensive goods look affordable,” says Vishal Dhawan, Founder & CEO, Plan Ahead Wealth Advisors. This separation between purchase and pain of paying makes it easy to justify the higher expense. Remember that even a no-cost EMI may include processing and other fees.
Number tricks (Charm price, left digit effect): Using numbers to create an illusion of lower prices is often used by retailers. For instance, items with prices ending in 9 (charm price) are typically bought more by customers. This is because people focus on the leftmost digit of a number, which appears to be much lower than the next whole number, even though the difference is just one rupee. Similarly, removing commas from prices or using a number with a decimal instead of a whole number makes these appear less expensive.
HOW TO AVOID BEING PSYCHED
Stick to the list: Decide what you need to buy before entering a store or opening an app. Make a list and set a budget for each item. This reduces the likelihood of buying products simply because they are discounted or prominently displayed. “If an item is not on that list, walk away regardless of how tempting it seems. Group items into essentials and discretionary, so you know what to prioritise,” says Dhawan.The 24-hour rule: When you feel tempted to buy something you had not planned, wait at least 24 hours before making the purchase. This cooling-off period helps assess whether you genuinely need the product or are reacting to the discount or ‘limited period’ offer. “The urge to buy is a wave; it rises, peaks and passes, usually within hours,” explains Kohli.
The same principle applies to flash sale clocks that trigger panic and lead to FOMO. “Take a breather from your phone or the store shelf. Stepping away lets common sense return before FOMO takes over,” says Dhawan.
Use cash, remove card details: Bring back the pain of paying by using cash, says Kohli. Using cash or a debit card makes spending feel tangible, while watching money leave your hands or account creates a natural brake. Only swipe a credit card if you can pay the bill in full. Also delete the auto-filled credit card details and digital wallets from shopping apps. “Forcing yourself to manually type card details adds enough friction to rethink the purchase. Getting up to find your physical wallet and typing out the card details gives your mind time to pause,” says Dhawan.
Decode the numbers: Round off Rs.1,999 to Rs.2,000; treat ‘only 2 left’ as a design choice, not fact; and don’t add a Rs.500 item to avoid a Rs.50 delivery fee. “Translate every ‘save’ into ‘spend’. If ‘save Rs.4,000’ means spending Rs.6,000, ask yourself if you would buy the item without a sale,” says Kohli.
Calculate the full EMI cost: Don’t judge af fordability by the monthly instalment alone. Consider the final bill: full repayment amount, processing fees, interest, and any discounts you may forgo by choosing EMI. If paying the full price strains your wallet, postpone the purchase, and don’t use EMIs to purchase ‘wants’.
Don’t shop depressed: Never shop when you are depressed, tired, hungry, or late at night because depleted people spend more, says Kohli. Also, take a handbag instead of a shopping cart, and don’t befriend the salesperson since these tactics are meant to make you spend more, as countless research studies claim.
Ask these questions before buying in a festive sale
1. Would I buy if the item weren’t on discount?
If the answer is no, you may be reacting to the big discount rather than addressing an actual need. This can help you distinguish planned purchases from impulse buys triggered by festive sale promotions.
2. How often will I use it?
An expensive gadget used daily may offer better value for money than a discounted product that remains unused. Estimate the cost per use by dividing the purchase price by the number of times you expect to use it. It will help assess whether the product offers lasting value or a temporary high.
3. Is this a genuine discount?
A big discount doesn’t always translate into a good deal. Compare the discounted price with the product’s usual selling price across different retailers and platforms. Also, consider whether you can find the same product at a lower price elsewhere. Focus on the final price, not the discount.
4. What am I giving up to afford this?
Every purchase involves an opportunity cost. Consider whether the amount could be used for savings, debt repayment, an emergency fund or a financial goal. If a purchase forces you to postpone an important expense, the discount may not justify the financial trade-off.
5. Can I buy this without a credit card or EMIs?
If you cannot afford a product without borrowing, reconsider whether you need it immediately. Credit cards and EMI schemes make expensive products seem affordable by breaking payments into smaller amounts, but interest, processing fees and late payment penalties can increase the total cost. For non essentials, save and buy when you can afford it.
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